##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

(Mark One)



|  |                                                                                            
|- | -------------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 5,
2002

or



|  |                                                                                             
|- | --------------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the transition period
from                     to

Commission File Number 001-13927

CSK AUTO CORPORATION

(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 86-0765798                              
|(State or other jurisdiction of
    Incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|645 E. Missouri Ave. Suite 400, Phoenix,
    Arizona               |  | 85012                                   
|(Address of principal executive
    offices)                       |  | (Zip Code)                              

(602) 265-9200

(Registrants telephone number, including
area code)


N/A

(Former name, former address and former fiscal
year,


if changed since last reports)


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days.

Yes     x     No     o

As of June 3, 2002, CSK Auto Corporation had
38,269,702 shares of common stock outstanding.



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TABLE OF CONTENTS



|                                                                                                                              |                                                                                               |  |  |  |  |  |  | 
|----------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION                                                                                                 
|                                                                                                                              | Item 1. Financial Statements                                                                 
|CSK AUTO CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS                                                            
|CSK AUTO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS                                                  
|CSK AUTO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY                                         
|CSK AUTO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)                       
|CSK AUTO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Thirteen Weeks Ended May 5, 2002
|                                                                                                                              | Note 1 -- Basis of Presentation                                                              
|                                                                                                                              | Note 2 -- Inventories                                                                        
|                                                                                                                              | Note 3 -- Issuance of Common Stock and Earnings Per Share                                    
|                                                                                                                              | Note 4 -- Recent Accounting Pronouncements                                                   
|                                                                                                                              | Note 5 -- Receivables                                                                        
|                                                                                                                              | Note 6 -- Interest Rate Swap                                                                 
|                                                                                                                              | Note 7 -- Legal Matters                                                                      
|                                                                                                                              | Note 8 -- Store Closing Costs                                                                
|                                                                                                                              | Note 9 -- Subsequent Events                                                                  
|                                                                                                                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                                                              | Overview                                                                                     
|                                                                                                                              | Results of Operations                                                                        
|                                                                                                                              | Thirteen Weeks Ended May 5, 2002 Compared to Thirteen Weeks Ended May 6, 2001                
|                                                                                                                              | Liquidity and Capital Resources                                                              
|                                                                                                                              | Overview of Liquidity                                                                        
|                                                                                                                              | Analysis of Cash Flows                                                                       
|                                                                                                                              | Store Closures                                                                               
|                                                                                                                              | Sale of Stores                                                                               
|                                                                                                                              | Risk Factors Affecting Liquidity and Capital Resources                                       
|                                                                                                                              | Sales Trends                                                                                 
|                                                                                                                              | Inflation                                                                                    
|                                                                                                                              | Debt Covenant Compliance                                                                     
|                                                                                                                              | Interest Rates                                                                               
|                                                                                                                              | Critical Accounting Matters                                                                  
|                                                                                                                              | Recent Accounting Pronouncements                                                             
|                                                                                                                              | Forward-looking Statements                                                                   
|PART II OTHER INFORMATION                                                                                                    
|                                                                                                                              | Item 1. Legal Proceedings                                                                    
|                                                                                                                              | Item 2. Changes in Securities and Use of Proceeds                                            
|                                                                                                                              | Item 3. Defaults upon Senior Securities                                                      
|                                                                                                                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                                                                                              | Item 5. Other Information                                                                    
|                                                                                                                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                                                                                                                    
|EXHIBIT LIST                                                                                                                 



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##### Table of Contents






PART I

FINANCIAL INFORMATION




Item 1.     Financial
Statements




CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |          |           | 
|--------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------- | --------- | - | ------- | -------- | --------- | 
|                                                                      |                                                                                                                                                                                    | May 5,                                     |         | February 3,
|                                                                      |                                                                                                                                                                                    | 2002                                       |         | 2002       
|                                                                      |                                                                                                                                                                                    |                                            |         |            
|                                                                      |                                                                                                                                                                                    | (Unaudited)                                |         |            
|ASSETS                                                               
|Cash and cash equivalents                                             |                                                                                                                                                                                    | $                                          | 14,885  |             |           | $ | 16,084  |         
|Receivables, net of allowances of $5,586 and
    $5,230, respectively |                                                                                                                                                                                    |                                            | 92,087  |             |           |   | 84,793  |         
|Inventories                                                           |                                                                                                                                                                                    |                                            | 643,905 |             |           |   | 619,629 |         
|Deferred income taxes                                                 |                                                                                                                                                                                    |                                            | 623     |             |           |   | 2,718   |         
|Assets held for sale                                                  |                                                                                                                                                                                    |                                            | 1,009   |             |           |   | 1,710   |         
|Prepaid expenses and other current assets                             |                                                                                                                                                                                    |                                            | 15,542  |             |           |   | 19,847  |         
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                    | Total current assets                       |         |             | 768,051   |   |         |          | 744,781   | 
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|Property and equipment, net                                           |                                                                                                                                                                                    |                                            | 144,128 |             |           |   | 150,381 |         
|Leasehold interests, net                                              |                                                                                                                                                                                    |                                            | 16,110  |             |           |   | 16,581  |         
|Goodwill                                                              |                                                                                                                                                                                    |                                            | 127,069 |             |           |   | 126,846 |         
|Deferred income taxes                                                 |                                                                                                                                                                                    |                                            | 739     |             |           |   | 739     |         
|Other assets, net                                                     |                                                                                                                                                                                    |                                            | 28,746  |             |           |   | 29,249  |         
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                    | Total assets                               |         | $           | 1,084,843 |   |         | $        | 1,068,577 | 
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|LIABILITIES AND STOCKHOLDERS
    EQUITY                             
|Accounts payable                                                      |                                                                                                                                                                                    | $                                          | 195,338 |             |           | $ | 157,284 |         
|Accrued payroll and related expenses                                  |                                                                                                                                                                                    |                                            | 31,973  |             |           |   | 33,055  |         
|Accrued expenses and other current liabilities                        |                                                                                                                                                                                    |                                            | 48,821  |             |           |   | 44,529  |         
|Current maturities of capital lease obligations                       |                                                                                                                                                                                    |                                            | 11,229  |             |           |   | 10,999  |         
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                    | Total current liabilities                  |         |             | 287,361   |   |         |          | 245,867   | 
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|Amounts due under Senior Credit Facility                              |                                                                                                                                                                                    |                                            | 200,000 |             |           |   | 227,000 |         
|Obligations under 12% Senior Notes                                    |                                                                                                                                                                                    |                                            | 275,617 |             |           |   | 275,416 |         
|Obligations under 11% Senior Subordinated Notes                       |                                                                                                                                                                                    |                                            | 81,250  |             |           |   | 81,250  |         
|Convertible 7% Subordinated Notes                                     |                                                                                                                                                                                    |                                            | 49,156  |             |           |   | 49,100  |         
|Obligations under capital leases                                      |                                                                                                                                                                                    |                                            | 24,195  |             |           |   | 27,078  |         
|Other                                                                 |                                                                                                                                                                                    |                                            | 8,352   |             |           |   | 8,580   |         
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                    | Total non-current liabilities              |         |             | 638,570   |   |         |          | 668,424   | 
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|Commitments and contingencies                                         |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|Stockholders equity:                                                 |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      | Common stock, $0.01 par value, 50,000,000 shares
    authorized, 32,479,305 and 32,370,746 shares issued and
    outstanding at May 5, 2002 and February 3, 2002,
    respectively |                                            |         | 325         |           |   |         | 324      |          
|                                                                      | Additional paid-in capital                                                                                                                                                         |                                            |         | 323,655     |           |   |         | 322,667  |          
|                                                                      | Stockholder receivable                                                                                                                                                             |                                            |         | (429        | )         |   |         | (686     | )        
|                                                                      | Accumulated deficit                                                                                                                                                                |                                            |         | (164,639    | )         |   |         | (168,019 | )        
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                    | Total stockholders equity                 |         |             | 158,912   |   |         |          | 154,286   | 
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         
|                                                                      |                                                                                                                                                                                    | Total liabilities and stockholders equity |         | $           | 1,084,843 |   |         | $        | 1,068,577 | 
|                                                                      |                                                                                                                                                                                    |                                            |         |             |           |   |         |         

The accompanying notes are an integral part of
these consolidated financial statements.

1



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##### Table of Contents






CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

(Unaudited)


(In thousands, except share and per share
data)


|                                           |                              |                      |            |         |      |   |            |         |      | 
|------------------------------------------ | ---------------------------- | -------------------- | ---------- | ------- | ---- | - | ---------- | ------- | ---- | 
|                                           |                              |                     
|                                           |                              | Thirteen Weeks Ended
|                                           |                              |                     
|                                           |                              | May 5,               |            | May 6, 
|                                           |                              | 2002                 |            | 2001   
|                                           |                              |                      |            |        
|Net sales                                  |                              | $                    | 375,550    |         |      | $ | 356,121    |        
|Cost of sales                              |                              |                      | 210,420    |         |      |   | 187,535    |        
|                                           |                              |                      |            |         |      |   |            |        
|Gross profit                               |                              |                      | 165,130    |         |      |   | 168,586    |        
|Other costs and expenses:                  |                              |                      |            |         |      |   |            |        
|                                           | Operating and administrative |                      |            | 141,638 |      |   |            | 144,921 |     
|                                           | Store closing costs          |                      |            | 300     |      |   |            | 2,295   |     
|                                           | Goodwill amortization        |                      |            |        |      |   |            | 1,183   |     
|                                           |                              |                      |            |         |      |   |            |        
|Operating profit                           |                              |                      | 23,192     |         |      |   | 20,187     |        
|Interest expense, net                      |                              |                      | 17,718     |         |      |   | 16,747     |        
|                                           |                              |                      |            |         |      |   |            |        
|Income before income taxes                 |                              |                      | 5,474      |         |      |   | 3,440      |        
|Income tax expense                         |                              |                      | 2,094      |         |      |   | 1,187      |        
|                                           |                              |                      |            |         |      |   |            |        
|Net income                                 |                              | $                    | 3,380      |         |      | $ | 2,253      |        
|                                           |                              |                      |            |         |      |   |            |        
|Basic earnings per share:                  |                              |                      |            |         |      |   |            |        
|                                           |                              | Net income           |            | $       | 0.10 |   |            | $       | 0.08 | 
|                                           |                              |                      |            |         |      |   |            |        
|Shares used in computing per share amounts |                              |                      | 32,412,923 |         |      |   | 27,841,178 |        
|                                           |                              |                      |            |         |      |   |            |        
|Diluted earnings per share:                |                              |                      |            |         |      |   |            |        
|                                           |                              | Net income           |            | $       | 0.10 |   |            | $       | 0.08 | 
|                                           |                              |                      |            |         |      |   |            |        
|Shares used in computing per share amounts |                              |                      | 32,472,337 |         |      |   | 27,841,178 |        
|                                           |                              |                      |            |         |      |   |            |        

The accompanying notes are an integral part of
these consolidated financial statements.

2



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CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS
EQUITY

(In thousands, except share data)


|                                               |  |              |            |            |  |             |     |             |  |         |         |        |  |   |      |   |  |   |          |   |  |   |         | 
|---------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | --- | ----------- |  | ------- | ------- | ------ |  | - | ---- | - |  | - | -------- | - |  | - | ------- | 
|                                               |  |              |            |            |  |             |     |             |  |        
|                                               |  | Common Stock |            | Additional |  |             |     |             |  |        
|                                               |  |              |            | Paid-in    |  | Stockholder |     | Accumulated |  | Total  
|                                               |  | Shares       |            | Amount     |  | Capital     |     | Receivable  |  | Deficit |         | Equity
|                                               |  |              |            |            |  |             |     |             |  |         |         |       
|Balances at February 3, 2002.                  |  |              | 32,370,746 |            |  | $           | 324 |             |  | $       | 322,667 |        |  | $ | (686 | ) |  | $ | (168,019 | ) |  | $ | 154,286 | 
|Issuance of common stock (unaudited)           |  |              | 105,708    |            |  |             | 1   |             |  |         | 967     |        |  |   |     |   |  |   |         |   |  |   | 968     | 
|Recovery of stockholder receivable (unaudited) |  |              |           |            |  |             |    |             |  |         |        |        |  |   | 257  |   |  |   |         |   |  |   | 257     | 
|Exercise of options (unaudited)                |  |              | 2,851      |            |  |             |    |             |  |         | 21      |        |  |   |     |   |  |   |         |   |  |   | 21      | 
|Net income (unaudited)                         |  |              |           |            |  |             |    |             |  |         |        |        |  |   |     |   |  |   | 3,380    |   |  |   | 3,380   | 
|                                               |  |              |            |            |  |             |     |             |  |         |         |        |  |   |      |   |  |   |          |   |  |   |         | 
|Balances at May 5, 2002 (unaudited)            |  |              | 32,479,305 |            |  | $           | 325 |             |  | $       | 323,655 |        |  | $ | (429 | ) |  | $ | (164,639 | ) |  | $ | 158,912 | 
|                                               |  |              |            |            |  |             |     |             |  |         |         |        |  |   |      |   |  |   |          |   |  |   |         | 



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The accompanying notes are an integral part of
these consolidated financial statements.

3



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##### Table of Contents






CSK AUTO CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Unaudited)


(In thousands)


|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |         |       |         |         |  
|---------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------------------- | -------------------------------------------------------- | ----- | ------- | ------- | ------- | ----- | ------- | ------- | -
|                                                           |                                                                                                 |                                                                     
|                                                           |                                                                                                 | Thirteen Weeks Ended                                                
|                                                           |                                                                                                 |                                                                     
|                                                           |                                                                                                 | May 5,                                                               |                                                                     | May 6,                                                  
|                                                           |                                                                                                 | 2002                                                                 |                                                                     | 2001                                                    
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                         
|Cash flows provided by (used in) operating
    activities: |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           | Net income                                                                                      |                                                                      | $                                                                   | 3,380                                                    |       |         | $       | 2,253   |      
|                                                           | Adjustments to reconcile net income to net cash
    provided by (used in) operating activities: |                                                                      |                                                                     |                                                          |       |         |         |         |      
|                                                           |                                                                                                 | Depreciation and amortization of property and
    equipment          |                                                                     |                                                          | 8,117 |         |         |         | 8,360 |        
|                                                           |                                                                                                 | Amortization of other items                                          |                                                                     |                                                          | 896   |         |         |         | 2,009 |        
|                                                           |                                                                                                 | Amortization of deferred financing costs                             |                                                                     |                                                          | 1,497 |         |         |         | 692   |        
|                                                           |                                                                                                 | Accretion of discount                                                |                                                                     |                                                          | 257   |         |         |         |      |        
|                                                           |                                                                                                 | Write downs on disposals of property, equipment
    and other assets |                                                                     |                                                          | 111   |         |         |         |      |        
|                                                           |                                                                                                 | Deferred income taxes                                                |                                                                     |                                                          | 2,095 |         |         |         | 1,034 |        
|                                                           |                                                                                                 | Change in operating assets and liabilities                           |                                                                     |                                                          |       |         |         |         |       |        
|                                                           |                                                                                                 |                                                                      | Receivables                                                         |                                                          |       | (7,294  | )       |         |       | (8,506  | )      
|                                                           |                                                                                                 |                                                                      | Inventories                                                         |                                                          |       | (24,276 | )       |         |       | (23,538 | )      
|                                                           |                                                                                                 |                                                                      | Prepaid expenses and other current assets                           |                                                          |       | 4,305   |         |         |       | (2,174  | )      
|                                                           |                                                                                                 |                                                                      | Accounts payable                                                    |                                                          |       | 38,054  |         |         |       | 61,849  |        
|                                                           |                                                                                                 |                                                                      | Accrued payroll, accrued expenses and other
    current liabilities |                                                          |       | 4,563   |         |         |       | (5,691  | )      
|                                                           |                                                                                                 |                                                                      | Other operating activities                                          |                                                          |       | (943    | )       |         |       | 1,621   |        
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           |                                                                                                 |                                                                      |                                                                     | Net cash provided by operating activities                |       |         | 30,762  |         |       |         | 37,909  |  
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|Cash flows provided by (used in) investing
    activities: |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           | Capital expenditures                                                                            |                                                                      |                                                                     | (2,103                                                   | )     |         |         | (4,643  | )    
|                                                           | Proceeds from sale of property and equipment and
    assets held for sale                       |                                                                      |                                                                     | 1,044                                                    |       |         |         | 5,808   |      
|                                                           | Other investing activities                                                                      |                                                                      |                                                                     | (1,116                                                   | )     |         |         | (1,206  | )    
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           |                                                                                                 |                                                                      |                                                                     | Net cash used in investing activities                    |       |         | (2,175  | )       |       |         | (41     | )
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|Cash flows provided by (used in) financing
    activities: |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           | Borrowings under Senior Credit Facility                                                         |                                                                      |                                                                     | 56,000                                                   |       |         |         | 55,000  |      
|                                                           | Payments under Senior Credit Facility                                                           |                                                                      |                                                                     | (83,000                                                  | )     |         |         | (88,000 | )    
|                                                           | Payment of deferred financing costs                                                             |                                                                      |                                                                     | (387                                                     | )     |         |         |        |      
|                                                           | Payments on capital lease obligations                                                           |                                                                      |                                                                     | (2,653                                                   | )     |         |         | (2,443  | )    
|                                                           | Recovery of stockholder receivable                                                              |                                                                      |                                                                     | 257                                                      |       |         |         |        |      
|                                                           | Exercise of options                                                                             |                                                                      |                                                                     | 21                                                       |       |         |         |        |      
|                                                           | Other financing activities                                                                      |                                                                      |                                                                     | (24                                                      | )     |         |         | (73     | )    
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           |                                                                                                 |                                                                      |                                                                     | Net cash used in financing activities                    |       |         | (29,786 | )       |       |         | (35,516 | )
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|                                                           |                                                                                                 |                                                                      |                                                                     | Net (decrease) increase in cash and cash
    equivalents |       |         | (1,199  | )       |       |         | 2,352   |  
|Cash and cash equivalents, beginning of period             |                                                                                                 |                                                                      | 16,084                                                              |                                                          |       |         | 11,131  |        
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        
|Cash and cash equivalents, end of period                   |                                                                                                 | $                                                                    | 14,885                                                              |                                                          |       | $       | 13,483  |        
|                                                           |                                                                                                 |                                                                      |                                                                     |                                                          |       |         |         |        

The accompanying notes are an integral part of
these consolidated financial statements.

4



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##### Table of Contents






CSK AUTO CORPORATION AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)


Thirteen Weeks Ended May 5,
2002


CSK Auto Corporation is a holding company. At
May 5, 2002, CSK Auto Corporation had no business activity
other than its investment in CSK Auto, Inc., a wholly-owned
subsidiary (Auto). On a consolidated basis, CSK Auto
Corporation and Auto are referred to herein as the
Company.

Auto is a specialty retailer of automotive
aftermarket parts and accessories. At May 5, 2002, the
Company operated 1,124 stores in 19 Western and Northern Plains
states as a fully integrated company and single business segment
under three brand names: Checker Auto Parts, founded in 1969 and
operating in the Southwestern, Rocky Mountain and Northern
Plains states and Hawaii; Schucks Auto Supply, founded in
1917 and operating in the Pacific Northwest and Alaska; and
Kragen Auto Parts, founded in 1947 and operating primarily in
California.




Note 1  Basis of
Presentation

The unaudited consolidated financial statements
included herein were prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission,
but do not include all information and footnotes required by
generally accepted accounting principles. In the opinion of
management, the consolidated financial statements reflect all
adjustments, which are of a normal recurring nature, necessary
for a fair presentation of the Companys financial position
and the results of its operations. The accompanying consolidated
financial statements should be read in conjunction with the
consolidated financial statements and related notes thereto for
the fiscal year ended February 3, 2002, as included in the
Companys Annual Report on Form 10-K/ A filed on
May 10, 2002.




Note 2  Inventories

Inventories are valued at the lower of cost or
market, cost being determined utilizing the last-in, first-out
(LIFO) method. An actual valuation of inventory under the LIFO
method can only be calculated at the end of a fiscal year based
upon the inventory levels and costs at that time. Accordingly,
interim LIFO calculations reflected herein are based upon
managements estimates of year-end inventory levels and
costs. The replacement cost of inventories approximated
$545 million and $528 million at May 5, 2002 and
February 3, 2002, respectively.

The carrying value of the inventory exceeds the
current replacement cost primarily as a result of the
application of the LIFO inventory method of accounting. The
Companys costs of acquiring inventories through normal
purchasing activities have been decreasing in recent years as
the Companys increased size and cash flows have enabled it
to take advantage of volume discounts and lower product
acquisition costs.

From time to time, the Company performs an
analysis of the net realizable value of the inventory, after
consideration of expected disposal costs and normal profit
margins, to determine if the LIFO carrying value of the
inventory is impaired. Should an impairment be indicated, the
carrying value of the inventory would be reduced. No such
impairment is indicated based on current market conditions.
Historically, the net realizable value of the inventory has
exceeded its carrying amount. The Companys analysis for
the first quarter of fiscal 2002 indicated that the net
realizable value approximated the carrying amount of inventories
at May 5, 2002. This was a result of the Companys
program to increase promotional pricing (temporarily reducing
selling prices of its products) in order to attract customers,
resulting in the lowering of gross profit margins in the first
quarter of fiscal 2002. The Company plans less promotional
activity throughout the remainder of fiscal 2002. Accordingly,
the Company expects the net realizable value of the inventories
to be higher than carrying values at the end of fiscal 2002.
Should management be unable to increase gross profit margins as
planned, an impairment of the carrying amount of inventories
could result.

5



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)







Note 3  Issuance of Common
Stock and Earnings Per Share

Pursuant to the agreements relating to our
convertible subordinated debentures, the Company paid interest
on the debentures in shares of the Companys common stock
in lieu of cash.

Calculation of shares used in computing per share
amounts is summarized as follows (unaudited):

|                                                  |  |                      |            |        |  |  |            | 
|------------------------------------------------- |  | -------------------- | ---------- | ------ |  |  | ---------- | 
|                                                  |  |                     
|                                                  |  | Thirteen Weeks Ended
|                                                  |  |                     
|                                                  |  | May 5,               |            | May 6,
|                                                  |  | 2002                 |            | 2001  
|                                                  |  |                      |            |       
|Weighted average number of shares (Basic)         |  |                      | 32,412,923 |        |  |  | 27,841,178 | 
|Effects of dilutive securities                    |  |                      | 59,414     |        |  |  |           | 
|                                                  |  |                      |            |        |  |  |            | 
|Weighted average number of shares (Dilutive)      |  |                      | 32,472,337 |        |  |  | 27,841,178 | 
|                                                  |  |                      |            |        |  |  |            | 
|Shares excluded as a result of
    anti-dilution: |  |                      |            |        |  |  |            | 
|Stock options                                     |  |                      | 2,582,947  |        |  |  | 2,848,556  | 
|Conversion of convertible subordinated debentures |  |                      | 5,753,740  |        |  |  |           | 




Note 4  Recent Accounting
Pronouncements

In June 2001, the Financial Accounting Standards
Board (FASB or the Board) issued Statement of
Financial Accounting Standards No. 141 (SFAS 141),
Business Combinations, and No. 142 (SFAS 142),
Goodwill and Other Intangible Assets. SFAS 141 supersedes
Accounting Principles Board Opinion (APB)
No. 16, Business Combinations. The provisions of
SFAS 141 (1) require that the purchase method of
accounting be used for all business combinations initiated after
June 30, 2001, (2) provide specific criteria for the
initial recognition and measurement of intangible assets apart
from goodwill, and (3) generally require that unamortized
negative goodwill be written off immediately as an extraordinary
gain instead of being deferred and amortized. SFAS 141 also
requires that upon adoption of SFAS 142 the Company
reclassify the carrying amounts of certain intangible assets
into or out of goodwill, based on certain criteria.
SFAS 142 supersedes APB 17, Intangible Assets, and is
effective for fiscal years beginning after December 15,
2001. SFAS 142 primarily addresses the accounting for
goodwill and intangible assets subsequent to their initial
recognition. The provisions of SFAS 142: (1) prohibit
the amortization of goodwill and indefinite-lived intangible
assets, (2) require that goodwill and indefinite-lived
intangibles assets be tested annually for impairment (and in
interim periods if certain events occur indicating that the
carrying value of goodwill and/or indefinite-lived intangible
assets may be impaired), (3) require that reporting units
be identified for the purpose of assessing potential future
impairments of goodwill, and (4) remove the forty-year
limitation on the amortization period of intangible assets that
have finite lives.

SFAS 142 requires that goodwill be tested
annually for impairment using a two-step process. The first step
is to identify a potential impairment and, in transition, this
step must be measured as of the beginning of the fiscal year.
However, a company has six months from the date of adoption to
complete the first step. The second step of the goodwill
impairment test measures the amount of the impairment loss
(measured as of the beginning of the year of adoption), if any,
and must be completed by the end of that fiscal year. Intangible
assets deemed to have an indefinite life will be tested for
impairment using a one-step process which compares the fair
value to the carrying amount of the asset as of the beginning of
the fiscal year.

The Company adopted the provisions of
SFAS 142 on February 4, 2002. As of the end of the
first quarter of fiscal 2002, the Company was still in the
process of completing its initial goodwill impairment test. The
Company expects to complete that first step of the goodwill
impairment test before the end of the second quarter of fiscal
2002. Any impairment charge that results from this test will be
recorded as a cumulative effect of a change in accounting
principle in the Companys statement of operations for
fiscal year 2002 and

6



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


would be a non-cash and non-operating charge.
Because of the complexity involved in adopting certain
provisions of SFAS 142, it is not practicable to reasonably
estimate the impact of adopting these statements on the
Companys financial statements at the date of this report,
including whether any transitional impairment losses, which
could be material, will be required to be recognized.

SFAS 142 requires the presentation of net
income and related earnings per share data adjusted for the
effect of goodwill amortization. The following table provides
adjusted net income and earnings per share data for the
thirteen weeks ended May 5, 2002 and May 6, 2001,
to illustrate the impact of goodwill amortization on the results
of the prior year period ($ in thousands except per share
amounts).

|                                       |                                   |                |       |        |  |   |       |      | 
|-------------------------------------- | --------------------------------- | -------------- | ----- | ------ |  | - | ----- | ---- | 
|                                       |                                   |               
|                                       |                                   | Thirteen Weeks
|                                       |                                   | Ended         
|                                       |                                   |               
|                                       |                                   | May 5,         |       | May 6,
|                                       |                                   | 2002           |       | 2001  
|                                       |                                   |                |       |       
|Reported net income                    |                                   | $              | 3,380 |        |  | $ | 2,253 |     
|Add: goodwill amortization, net of tax |                                   |                |      |        |  |   | 782   |     
|                                       |                                   |                |       |        |  |   |       |     
|Adjusted net income                    |                                   | $              | 3,380 |        |  | $ | 3,035 |     
|                                       |                                   |                |       |        |  |   |       |     
|Basic earnings per share:              |                                   |                |       |        |  |   |       |     
|                                       | Earnings per share as reported    |                | $     | 0.10   |  |   | $     | 0.08 | 
|                                       | Goodwill amortization, net of tax |                |       |       |  |   |       | 0.03 | 
|                                       |                                   |                |       |        |  |   |       |     
|                                       | Adjusted earnings per share       |                | $     | 0.10   |  |   | $     | 0.11 | 
|                                       |                                   |                |       |        |  |   |       |     
|Diluted earnings per share:            |                                   |                |       |        |  |   |       |     
|                                       | Earnings per share as reported    |                | $     | 0.10   |  |   | $     | 0.08 | 
|                                       | Goodwill amortization, net of tax |                |       |       |  |   |       | 0.03 | 
|                                       |                                   |                |       |        |  |   |       |     
|                                       | Adjusted earnings per share       |                | $     | 0.10   |  |   | $     | 0.11 | 
|                                       |                                   |                |       |        |  |   |       |     

The Companys intangible assets, excluding
goodwill, consist of favorable leasehold interests. As such,
SFAS 142 did not impact the useful lives assigned to these
intangible assets. Accumulated amortization as of May 5,
2002 and February 3, 2002 was $10.2 million and
$9.7 million, respectively. Estimated amortization expense
relating to leasehold interests for future periods is listed
below ($ in thousands):

|            |       |   |       |       | 
|----------- | ----- | - | ----- | ----- | 
|Fiscal 2002 |       | $ | 1,663 |      
|Fiscal 2003 |       |   | 1,643 |      
|Fiscal 2004 |       |   | 1,369 |      
|Fiscal 2005 |       |   | 1,264 |      
|Fiscal 2006 |       |   | 1,185 |      
|            |       |   |       |      
|            | Total |   | $     | 7,124 | 
|            |       |   |       |      

7



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


The changes in intangible assets, including
goodwill, for the first quarter of fiscal 2002 are as follows ($
in thousands):

|                               |                          |             |         |              |  |             |      |             |   |  |     |     |      |   |         |         | 
|------------------------------ | ------------------------ | ----------- | ------- | ------------ |  | ----------- | ---- | ----------- | - |  | --- | --- | ---- | - | ------- | ------- | 
|                               |                          | Carrying    |         |              |  |             |      | Carrying   
|                               |                          | value as of |         |              |  |             |      | value as of
|                               |                          | February 3, |         |              |  |             |      | May 5,     
|                               |                          | 2002        |         | Amortization |  | Adjustments |      | 2002       
|                               |                          |             |         |              |  |             |      |            
|Amortized intangible assets:   |                          |             |         |              |  |             |      |             |   |  |     |     |      |   |         |        
|                               | Leasehold interests, net |             | $       | 16,581       |  |             |      | (431        | ) |  |     | (40 | )(a) |   | $       | 16,110  | 
|Unamortized intangible assets: |                          |             |         |              |  |             |      |             |   |  |     |     |      |   |         |        
|                               | Goodwill                 |             |         | 126,846      |  |             |      |            |   |  |     | 223 | (b)  |   |         | 127,069 | 
|                               |                          |             |         |              |  |             |      |             |   |  |     |     |      |   |         |        
|Total intangible assets        |                          | $           | 143,427 |              |  |             | (431 | )           |   |  | 183 |     |      | $ | 143,179 |        
|                               |                          |             |         |              |  |             |      |             |   |  |     |     |      |   |         |        



---



|    |  |                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------
|(a) |  | Represents write-offs for stores identified for
    closure.                                    
|   
|(b) |  | Represents a contingent payment made for a store
    acquisition consummated during fiscal 2000.

In October 2001, the FASB issued
SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144
replaces certain previously issued accounting guidance, develops
a single accounting model for long-lived assets, and broadens
the framework previously established for assets to be disposed
of by sale (whether previously held or newly acquired). The
Company adopted SFAS No. 144 as of the beginning of
fiscal 2002. The adoption of this standard did not have a
material effect on our financial position, results of operations
or cash flows.




Note 5  Receivables

Accounts receivable consist of the following ($
in thousands):

|                                                                                      |                         |        |        |             |  |   |        |        | 
|------------------------------------------------------------------------------------- | ----------------------- | ------ | ------ | ----------- |  | - | ------ | ------ | 
|                                                                                      |                         | May 5, |        | February 3,
|                                                                                      |                         | 2002   |        | 2002       
|                                                                                      |                         |        |        |            
|Trade receivables from commercial and other
    customers                             |                         | $      | 27,911 |             |  | $ | 29,567 |       
|Amounts due under vendor rebate programs and
    cooperative advertising arrangements |                         |        | 67,025 |             |  |   | 57,691 |       
|Landlord and subtenant receivables                                                    |                         |        | 1,875  |             |  |   | 2,030  |       
|Other                                                                                 |                         |        | 862    |             |  |   | 735    |       
|                                                                                      |                         |        |        |             |  |   |        |       
|                                                                                      | Gross receivables       |        |        | 97,673      |  |   |        | 90,023 | 
|Allowance for doubtful accounts                                                       |                         |        | (5,586 | )           |  |   | (5,230 | )     
|                                                                                      |                         |        |        |             |  |   |        |       
|                                                                                      | Net accounts receivable |        | $      | 92,087      |  |   | $      | 84,793 | 
|                                                                                      |                         |        |        |             |  |   |        |       

The Company reflects amounts to be paid or
credited to the Company by vendors as receivables. Pursuant to
contract terms, the Company has the right to offset vendor
receivables against corresponding accounts payables, thus
minimizing the risk of non-collection of these receivables.




Note 6  Interest Rate
Swap

During February 2002, the Company entered into an
interest rate swap contract to convert the interest rate payment
obligation on $100.0 million of its 12% Senior Notes to a
floating rate, set quarterly, equal to the 3 month LIBOR +
760 basis points. At the time the contract commenced, the
Companys fixed rate debt was approximately 66% of its
outstanding debt. The Companys fixed rate debt, on
average, was at higher interest rates than its variable rate
debt. The interest rate swap is intended to provide a more equal
balance of fixed and

8



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


variable rate debt instruments and to hedge the
fair value of these notes against potential movements in market
interest rates.

For accounting purposes, the interest rate swap
is designated and qualifies as a fair value hedge of a portion
of the Companys fixed rate debt instruments. As the
critical terms of the swap match those of the underlying hedged
debt, the change in fair value of the swap is perfectly offset
by changes in fair value of the debt.




Note 7  Legal
Matters

The Company was served on March 8, 2000 with
a complaint filed in Federal Court in the Eastern District of
New York by the Coalition for a Level Playing Field, O.K. and,
based on the current amended complaint, 255 individual auto
parts dealers alleging that the Company and seven other auto
parts dealers (AutoZone, Inc., Wal-Mart Stores, Inc., Advance
Stores Company, Inc., Discount Auto, Inc., The Pep
Boys  Manny, Moe and Jack, Inc., OReilly
Automotive, Inc., and Keystone Automotive Operations, Inc.)
violated the Robinson-Patman Act. Only 15 of the individual
plaintiffs asserted claims against the Company. The complaint,
which has been amended, alleges that the Company and other
defendants knowingly either induced or received discriminatory
prices from large suppliers, allegedly in violation of
Section 2(a) and 2(f) of the Robinson-Patman Act, as well
as received compensation from large suppliers for services not
performed for those suppliers, allegedly in violation of Section
2(c) of the Robinson-Patman Act. In May 2002, the Company
reached a tentative settlement with all of the plaintiffs that
provides for the payment of nominal consideration by the
Company. As the first step in the settlement, the attorneys for
the Company and the plaintiffs have filed with the Court a
Stipulation and Order for the dismissal with prejudice of all
claims by all plaintiffs against the Company.

The Company currently and from time to time is
involved in other litigation incidental to the conduct of its
business. The damages claimed in some of this litigation are
substantial. Although the amount of liability that may result
from these matters cannot be ascertained, the Company does not
currently believe that such matters, in the aggregate, will
result in liabilities material to its consolidated financial
position, results of operations or cash flows.




Note 8  Store Closing
Costs

On an on-going basis, store locations are
reviewed and analyzed based on several factors including market
saturation, store profitability, and store size and format. In
addition, the Company analyzes sales trends and geographical and
competitive factors to determine the viability and future
profitability of store locations. If a store location does not
meet required projections, it is identified for closure. As a
result of acquisitions over the last several years, the Company
has closed numerous locations as a result of store overlap with
previously existing store locations. To the extent possible, the
Company negotiates with the landlord to cancel the lease or the
Company subleases the store to a third party to reduce future
exposure.

The Company provides an allowance for estimated
costs to be incurred in connection with store closures. The
allowance for store closing costs primarily consists of three
components: (1) future rents to be paid over the remaining
terms of the lease agreements for the stores or anticipated
early termination settlements with landlords (net of estimated
probable sublease recoveries); (2) lease commissions
associated with the anticipated store subleases; and
(3) occupancy expenses associated with the closed store
vacancy periods. Such costs are recognized when a store is
specifically identified, costs can be estimated and closure is
planned to be completed within the next twelve months. No
provision is made for employee termination costs. For stores to
be relocated, such costs are recognized when an agreement for
the new location has been reached with a landlord and site plans
meet preliminary municipal approvals. During the period that
they remain open for business, the rent and other operating
expenses for the stores to be closed continue to be reflected in
our

9



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


normal operating expenses. The actual costs of
relocating a store, such as transporting of inventories, are
considered a normal operating expense and are not included in
the store closing reserve.

As of May 5, 2002, the Company had a total
of 242 store locations included in the allowance for store
closing costs. Of this total, 68 locations were vacant, 170
locations were subleased and 4 locations were identified for
closure but remained open as of quarter-end. During fiscal 2002,
the Company expects cash outflows related to these store
locations of approximately $7.0 million for rent on vacant
stores, related occupancy expenses, leasing commissions and net
shortfalls on cash rents from subleased locations.

During the first quarter of fiscal 2002, the
Company recorded gross store closing costs of $0.3 million
relating to 4 stores identified for closure. Activity in the
provision for store closings and the related store closing costs
for the first quarter of fiscal 2002 is as follows ($ in
thousands):

|                           |                                          |                |       |        |        |  
|-------------------------- | ---------------------------------------- | -------------- | ----- | ------ | ------ | -
|Balance, beginning of year |                                          | $              | 6,771 |       
|Store closing costs, gross |                                          |                | 300   |       
|Payments:                  |                                          |                |       |       
|                           | Rent expense, net of sublease recoveries |                |       | (1,384 | )     
|                           | Occupancy and other expenses             |                |       | (724   | )     
|                           | Sublease commissions and buyouts         |                |       | (142   | )     
|                           |                                          |                |       |       
|                           |                                          | Total payments |       |        | (2,250 | )
|                           |                                          |                |       |       
|Balance, end of quarter    |                                          | $              | 4,821 |       
|                           |                                          |                |       |       

On a store count basis, activity and the
remaining number of stores to be closed are summarized as
follows:

|                           |  |                               |    |        |  |            |    |        |  |            |    |   |  |  |     |   |  |  |   | 
|-------------------------- |  | ----------------------------- | -- | ------ |  | ---------- | -- | ------ |  | ---------- | -- | - |  |  | --- | - |  |  | - | 
|                           |  |                               |    |       
|                           |  | Number of Stores to be Closed |    |       
|                           |  |                               |    |       
|Store Count by             |  | Beginning                     |    | Stores |  | Plan       |    | Stores |  | Balance to
|Fiscal Year                |  | Balance                       |    | Added  |  | Amendments |    | Closed |  | be Closed 
|                           |  |                               |    |        |  |            |    |        |  |           
|2000                       |  |                               | 28 |        |  |            | 24 |        |  |            | (1 | ) |  |  | (42 | ) |  |  | 9 | 
|2001                       |  |                               | 9  |        |  |            | 46 |        |  |            | (2 | ) |  |  | (46 | ) |  |  | 7 | 
|2002 (through May 5, 2002) |  |                               | 7  |        |  |            | 4  |        |  |            |   |   |  |  | (7  | ) |  |  | 4 | 

At May 5, 2002, there were 4 stores
remaining to be closed under our store closing plans, comprised
of the following:

|                           |  |              |    |            |  |        |    |            |  |  |     |   |  |  |   | 
|-------------------------- |  | ------------ | -- | ---------- |  | ------ | -- | ---------- |  |  | --- | - |  |  | - | 
|Store Count by             |  | Stores in    |    | Plan       |  | Stores |    | Balance to
|Fiscal Year of Accrual     |  | Closing Plan |    | Amendments |  | Closed |    | be Closed 
|                           |  |              |    |            |  |        |    |           
|1999                       |  |              | 87 |            |  |        | (2 | )          |  |  | (84 | ) |  |  | 1 | 
|2000                       |  |              | 24 |            |  |        |   |            |  |  | (24 | ) |  |  |  | 
|2001                       |  |              | 46 |            |  |        | (2 | )          |  |  | (43 | ) |  |  | 1 | 
|2002 (through May 5, 2002) |  |              | 4  |            |  |        |   |            |  |  | (2  | ) |  |  | 2 | 
|                           |  |              |    |            |  |        |    |            |  |  |     |   |  |  |   | 
|                           |  |              |    |            |  |        |    |            |  |  |     |   |  |  | 4 | 




Note 9  Subsequent
Events

During the second quarter of fiscal 2002, the
Company sold 13 stores in Texas. The stores were sold as they
are in relatively remote locations that do not allow us
warehousing and distribution efficiencies. This transaction
resulted in net cash proceeds of approximately
$4.2 million. The Company has not yet determined the impact
of this transaction on its results of operations for the second
quarter of fiscal 2002.

10



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##### Table of Contents



CSK AUTO CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Unaudited)


On May 20, 2002, the Companys
$50 million subordinated debentures issued in December 2001
were converted into approximately 5.75 million shares of
CSK Auto Corporation common stock. In addition, the Company
elected to pay interest accrued for the period of April 1,
2002 to the date of conversion on the debentures by issuing
30,872 additional shares of CSK Auto Corporation common stock in
lieu of cash during the second quarter of fiscal 2002.

11



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##### Table of Contents






Item 2.     Managements
Discussion and Analysis of Financial Condition and Results of
Operations




Overview

Our business is somewhat seasonal in nature, with
the highest sales occurring in the summer months of June through
August (overlapping our second and third fiscal quarters). Our
business is, in addition, affected by weather conditions. While
unusually severe or inclement weather tends to reduce sales as
our customers tend to defer elective maintenance during such
periods, extremely hot and cold temperatures tend to enhance
sales by causing auto parts to fail and sales of seasonal
products to increase.




Results of
Operations

The following table expresses the statements of
operations as a percentage of sales for the periods shown:

|                                 |  |                |       |        |  |  |       |  
|-------------------------------- |  | -------------- | ----- | ------ |  |  | ----- | -
|                                 |  |               
|                                 |  | Thirteen Weeks
|                                 |  | Ended         
|                                 |  |               
|                                 |  | May 5,         |       | May 6,
|                                 |  | 2002           |       | 2001  
|                                 |  |                |       |       
|Net sales                        |  |                | 100.0 | %      |  |  | 100.0 | %
|Cost of sales                    |  |                | 56.0  |        |  |  | 52.7  |  
|                                 |  |                |       |        |  |  |       |  
|Gross profit                     |  |                | 44.0  |        |  |  | 47.3  |  
|Operating and administrative     |  |                | 37.7  |        |  |  | 40.7  |  
|Store closing costs              |  |                | 0.1   |        |  |  | 0.6   |  
|Goodwill amortization            |  |                |      |        |  |  | 0.3   |  
|                                 |  |                |       |        |  |  |       |  
|Operating profit                 |  |                | 6.2   |        |  |  | 5.7   |  
|Interest expense, net            |  |                | 4.7   |        |  |  | 4.7   |  
|                                 |  |                |       |        |  |  |       |  
|Income before income tax expense |  |                | 1.5   |        |  |  | 1.0   |  
|Income tax expense               |  |                | 0.6   |        |  |  | 0.3   |  
|                                 |  |                |       |        |  |  |       |  
|Net income                       |  |                | 0.9   | %      |  |  | 0.7   | %
|                                 |  |                |       |        |  |  |       |  




Thirteen Weeks Ended May 5, 2002 Compared
to Thirteen Weeks Ended May 6, 2001

Net sales for the thirteen weeks ended
May 5, 2002 (the first quarter of fiscal 2002)
increased 5.5% to $375.6 million from $356.1 million
for the thirteen weeks ended May 6, 2001 (the first
quarter of fiscal 2001). Same store sales increased 7%.
Sales increased during the first quarter of fiscal 2002 despite
a lower total store count as we had 1,124 stores in operation at
May 5, 2002 compared to 1,155 at May 6, 2001. During
the first quarter of 2002, we opened 1 store, expanded
1 store and closed 7 stores, 5 of which were closed as
part of the Profitability Enhancement Program.

During the first quarter of fiscal 2002, we took
several steps to encourage former and existing customers to
return to our stores and to attract new customers who may have
never previously shopped in one of our stores. These initiatives
included: (1) an increased emphasis on promotional
activities and promotional pricing to stimulate customer
awareness; (2) the commencement of a new merchandising
program that features garage maintenance and organizational
products, items that we had never previously stocked; and
(3) a replenishment of inventory to return our stores to
more normal levels of product availability. While these steps
were successful in increasing customer counts, average sale
amount and total sales levels expectedly produced lower gross
profit margins. Gross profit was $165.1 million, or 44.0%
of net sales, in the first quarter of fiscal 2002 as compared to
$168.6 million, or 47.3% of net sales, in the first quarter
of fiscal 2001.

Operating profit for the first quarter of fiscal
2002 totaled $23.2 million, or 6.2% of net sales, compared to
$20.2 million, or 5.7% of net sales, for the first quarter
of fiscal 2001. Operating and administrative expenses were lower
in the first quarter of fiscal 2002 than in the same quarter of
fiscal 2001 reflecting the impact of our Profitability
Enhancement Program, the operation of fewer stores, and by the
elimination of goodwill

12



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##### Table of Contents



amortization, which was $1.2 million in the same
quarter of fiscal 2001. These savings were offset in part by
higher variable costs associated with our increased sales.
Operating profit during the first quarter of 2001 was affected
by: (1) store closing costs of $1.8 million relating to
longer-than-expected vacancy periods at stores closed as a
result of acquisitions; (2) a $1.2 million loss on the
disposition of certain acquired fixed assets; and
(3) $0.2 million of transition and integration costs
relating to prior acquisitions.


Interest expense for the first quarter of fiscal
2002 totaled $17.7 million compared to $16.7 million
in the first quarter of 2001. The higher interest expense
resulted from slightly higher outstanding loan balances during
the first quarter of fiscal 2002.

Income tax expense for the first quarter of
fiscal 2002 was $2.1 million, compared to $1.2 million
for the comparable period of fiscal 2001. Our effective tax rate
during the 2002 period was approximately 38.3% of pre-tax income
versus approximately 34.5% in the comparable 2001 period. The
lower rate during the 2001 period resulted from certain tax
credits that were not available in the 2002 period.

As a result of the above factors, net income
increased to $3.4 million, or $0.10 per diluted common
share, for the first quarter of fiscal 2002, compared to net
income of $2.3 million, or $0.08 per diluted common share,
for the first quarter of fiscal 2001.




Liquidity and Capital Resources




Overview of
Liquidity

During fiscal 2001, we completed a refinancing
(the Refinancing) of our capital structure, which
resulted in the elimination of scheduled bank debt amortization
payments prior to the end of 2004, the extension of debt
maturities and enhanced liquidity. The Refinancing consisted of
the following: (1) the issuance of a $30.0 million, 7%
convertible subordinated note, which was converted during fiscal
2001 into approximately 4.5 million shares of CSK Auto
Corporation common stock at a conversion price of $6.63 per
share; (2) a new three-year $300.0 million senior
secured, asset-based credit facility due in December 2004
comprised of a $170.0 million non-amortizing term loan and
a $130.0 million revolving credit facility; (3) the
issuance of $280.0 million of 12% Senior Notes due 2006;
and (4) the sale of $50.0 million of 7% convertible
subordinated debentures due December 2006 and related make-whole
warrants.

On May 20, 2002, the $50 million
convertible subordinated debentures were converted at our
election into approximately 5.75 million shares of our
common stock at the contractual standard conversion price of
$8.69 per share. In addition, we elected to pay interest on the
debentures in additional shares of our common stock in lieu of
cash. Of the additional interest shares issued, 105,708 were
issued during the first quarter of fiscal 2002 and 30,872 were
issued during the second quarter of fiscal 2002.

Our primary cash requirements include working
capital (primarily inventory), interest on our debt and capital
expenditures. Due to the Refinancing, we will not be required to
make any debt amortization payments prior to December 2004 other
than capital lease payments. We intend to finance our cash
requirements with cash flow from operations and borrowings under
our senior credit facility. The following table outlines our
working capital and liquidity:

|                                            |  |             |         |              |  |   |         | 
|------------------------------------------- |  | ----------- | ------- | ------------ |  | - | ------- | 
|                                            |  | May 5, 2002 |         | Feb. 3, 2002
|                                            |  |             |         |             
|Net current assets                          |  | $           | 480,690 |              |  | $ | 498,914 | 
|                                            |  |             |         |              |  |   |         | 
|Cash                                        |  | $           | 14,885  |              |  | $ | 16,084  | 
|Availability under revolving line of credit |  |             | 75,572  |              |  |   | 35,885  | 
|                                            |  |             |         |              |  |   |         | 
|Total liquidity                             |  | $           | 90,457  |              |  | $ | 51,969  | 
|                                            |  |             |         |              |  |   |         | 

As of May 5, 2002, we had net working
capital of approximately $480.7 million, a decrease of
$18.2 million, or 4%, compared to February 3, 2002.
Inventory levels increased to $643.9 million at the end of
the first quarter of fiscal 2002 from $619.6 million at the
end of fiscal 2001. The decrease in working capital primarily
relates to the $24.3 million increase in inventories
consistent with increased purchase levels in

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anticipation of our spring selling season, offset
by an increase in accounts payable of $38.1 million
relating to the related inventory purchases.


As of May 5, 2002, we had total liquidity
(cash plus availability under our existing revolving credit
facility) of approximately $90.5 million. Our liquidity was
limited by borrowing base calculations associated with our new
senior credit facility. The borrowing base formula is equal to
the lesser of $300.0 million and the sum of certain
percentages of our eligible inventory and accounts receivable.
As a result of the limitations imposed by the borrowing base
formula, at May 5, 2002, we could only borrow up to
$284.2 million of the total $300.0 million facility.
Accordingly, we have $15.8 million of additional borrowing
capacity that has not been included in our liquidity calculation
but that may be, in the future, subject to the borrowing base
calculation.

Debt is an important part of our overall
capitalization and we have been highly leveraged. Our total
outstanding debt balances have increased to fund working capital
requirements; however, our debt to equity ratio has improved.
The table below details our debt to equity ratio and, on a pro
forma basis, details our debt to equity ratio assuming the
conversion of our $50 million debentures.

|                                                                              |  |             |         |              |  |   |         | 
|----------------------------------------------------------------------------- |  | ----------- | ------- | ------------ |  | - | ------- | 
|                                                                              |  | May 5, 2002 |         | Feb. 3, 2002
|                                                                              |  |             |         |             
|Debt, including capital lease obligations                                     |  | $           | 641,447 |              |  | $ | 670,843 | 
|Equity                                                                        |  |             | 158,912 |              |  |   | 154,286 | 
|                                                                              |  |             |         |              |  |   |         | 
|Debt to equity ratio                                                          |  |             | 4.0     |              |  |   | 4.3     | 
|                                                                              |  |             |         |              |  |   |         | 
|*Debt to equity ratio, assuming conversion of
    $49.1 million in debentures |  |             | 2.8     |              |  |   | 3.1     | 
|                                                                              |  |             |         |              |  |   |         | 



---



|  |                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------
|* | We converted our convertible subordinated
    debentures into approximately 5.75 million shares of our
    common stock on May 20, 2002.




Analysis of Cash Flows

During the first quarter of fiscal 2002, net cash
provided by operating activities was $30.8 million compared
to $37.9 million of cash provided by operating activities
during the first quarter of fiscal 2001. The largest components
of the change in cash flow from operations relate to:
(1) an increase in payments for accounts payable, where
$38.1 million of cash was provided compared to
$61.8 million provided during the comparable 2001 period
due to additional payments made during the fiscal 2002 period as
a result of our improved liquidity arising from our Refinancing;
partially offset by (2) a net decrease in payments for
accrued expenses of $10.3 million primarily as a result of
the payment of $8.8 million during the fiscal 2001 period
relating to settlement of the class action lawsuit.

Net cash used in investing activities totaled
$2.2 million for the first quarter of fiscal 2002, compared
to $41,000 used during the comparable 2001 period. The increase
in cash used in investing activities during fiscal 2002 was
primarily the result of lower proceeds from fixed asset sales.
In fiscal 2001, $5.8 million in proceeds from fixed asset
sales were the result of a large sale leaseback transaction.
Also, capital expenditures during the first quarter of fiscal
2002 were $2.5 million less than in the first quarter of
fiscal 2001.

Net cash used in financing activities totaled
$29.8 million for the first quarter of fiscal 2002 compared
to $35.5 million for the first quarter of fiscal 2001. This
decrease primarily relates to lower payments on our senior
credit facility, where $27 million in net payments were
made during the first quarter of fiscal 2002 compared to
$33 million in net payments made during the first quarter
of fiscal 2001.




Store Closures

On an on-going basis, store locations are
reviewed and analyzed based on several factors including market
saturation, store profitability, and store size and format. In
addition, we analyze sales trends and geographical and
competitive factors to determine the viability and future
profitability of our store locations. If a store location does
not meet our required projections, it is identified for closure.
As a result of our acquisitions over the last several years, we
have closed numerous locations as a result of store overlap with
previously existing

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store locations. To the extent possible, we
negotiate with the landlord to cancel the lease or we sublease
the store to a third party to reduce our future exposure.


We provide an allowance for estimated costs to be
incurred in connection with store closures. The allowance for
store closing costs primarily consists of three components:
(1) future rents to be paid over the remaining terms of the
lease agreements for the stores (net of estimated probable
sublease recoveries); (2) lease commissions associated with
the anticipated store subleases; and (3) occupancy expenses
associated with the closed store vacancy periods. Such costs are
recognized when a store is specifically identified, costs can be
estimated and closure is planned to be completed within the next
twelve months. No provision is made for employee termination
costs. For stores to be relocated, such costs are recognized
when an agreement for the new location has been reached with a
landlord and site plans meet preliminary municipal approvals.
During the period that they remain open for business, the rent
and other operating expenses for the stores to be closed
continue to be reflected in our normal operating expenses. The
actual costs of relocating a store, such as transporting of
inventories, are considered a normal operating expense and are
not included in the store closing reserve.

As of May 5, 2002, we had a total of 242
store locations included in the allowance for store closing
costs. Of this total, 68 locations were vacant,
170 locations were subleased and 4 locations were
identified for closure but remained open as of quarter-end.
During fiscal 2002, we expect cash outflows related to these
store locations of approximately $7.0 million for rent on
vacant stores, related occupancy expenses, leasing commissions
and net shortfalls on cash rents from subleased locations.

During the first quarter of fiscal 2002, we
recorded gross store closing costs of $0.3 million relating
to 4 stores identified for closure. Activity in the provision
for store closings and the related store closing costs for the
first quarter of fiscal 2002, is as follows ($ in
thousands):

|                           |                                          |                |       |        |        |  
|-------------------------- | ---------------------------------------- | -------------- | ----- | ------ | ------ | -
|Balance, beginning of year |                                          | $              | 6,771 |       
|Store closing costs, gross |                                          |                | 300   |       
|Payments:                  |                                          |                |       |       
|                           | Rent expense, net of sublease recoveries |                |       | (1,384 | )     
|                           | Occupancy and other expenses             |                |       | (724   | )     
|                           | Sublease commissions and buyouts         |                |       | (142   | )     
|                           |                                          |                |       |       
|                           |                                          | Total payments |       |        | (2,250 | )
|                           |                                          |                |       |       
|Balance, end of quarter    |                                          | $              | 4,821 |       
|                           |                                          |                |       |       

On a store count basis, activity and the
remaining number of stores to be closed are summarized as
follows:

|                           |  |                               |    |        |  |            |    |        |  |            |    |   |  |  |     |   |  |  |   | 
|-------------------------- |  | ----------------------------- | -- | ------ |  | ---------- | -- | ------ |  | ---------- | -- | - |  |  | --- | - |  |  | - | 
|                           |  |                               |    |       
|                           |  | Number of Stores to be Closed |    |       
|                           |  |                               |    |       
|Store Count by             |  | Beginning                     |    | Stores |  | Plan       |    | Stores |  | Balance to
|Fiscal Year                |  | Balance                       |    | Added  |  | Amendments |    | Closed |  | be Closed 
|                           |  |                               |    |        |  |            |    |        |  |           
|2000                       |  |                               | 28 |        |  |            | 24 |        |  |            | (1 | ) |  |  | (42 | ) |  |  | 9 | 
|2001                       |  |                               | 9  |        |  |            | 46 |        |  |            | (2 | ) |  |  | (46 | ) |  |  | 7 | 
|2002 (through May 5, 2002) |  |                               | 7  |        |  |            | 4  |        |  |            |   |   |  |  | (7  | ) |  |  | 4 | 

At May 5, 2002, there were 4 stores
remaining to be closed under our store closing plans, comprised
of the following:

|                           |  |              |    |            |  |        |    |            |  |  |     |   |  |  |   | 
|-------------------------- |  | ------------ | -- | ---------- |  | ------ | -- | ---------- |  |  | --- | - |  |  | - | 
|Store Count by             |  | Stores in    |    | Plan       |  | Stores |    | Balance to
|Fiscal Year of Accrual     |  | Closing Plan |    | Amendments |  | Closed |    | be Closed 
|                           |  |              |    |            |  |        |    |           
|1999                       |  |              | 87 |            |  |        | (2 | )          |  |  | (84 | ) |  |  | 1 | 
|2000                       |  |              | 24 |            |  |        |   |            |  |  | (24 | ) |  |  |  | 
|2001                       |  |              | 46 |            |  |        | (2 | )          |  |  | (43 | ) |  |  | 1 | 
|2002 (through May 5, 2002) |  |              | 4  |            |  |        |   |            |  |  | (2  | ) |  |  | 2 | 
|                           |  |              |    |            |  |        |    |            |  |  |     |   |  |  |   | 
|                           |  |              |    |            |  |        |    |            |  |  |     |   |  |  | 4 | 

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Sale of Stores

During the second quarter of fiscal 2002, we sold
13 stores in Texas. The stores were sold as they were in
relatively remote locations that did not allow us warehousing
and distribution efficiencies. This transaction resulted in net
cash proceeds of approximately $4.2 million. We have not
yet determined the impact of this transaction on our results of
operations.




Risk Factors Affecting Liquidity and Capital
Resources






| |             
| | ------------
| | Sales Trends

Our business is somewhat seasonal in nature, with
the highest sales occurring in the summer months of June through
August (overlapping our second and third fiscal quarters). In
addition, our business is affected by weather conditions. While
unusually severe or inclement weather tends to reduce sales, as
our customers are more likely to defer elective maintenance
during such periods, extremely hot and cold temperatures tend to
enhance sales by causing auto parts to fail and sales of
seasonal products to increase.

As a result of our Refinancing during fiscal
2001, we were able to improve relationships with our vendors and
eliminate many out-of-stock conditions that pressured our sales.
Since the completion of our Refinancing, our same-store sales
increases have been in the mid-to-high single digits. In
addition, our same store retail customer counts have become
positive. This improved sales performance reflects our improved
inventory position and the generally favorable dynamics in the
U.S. automotive aftermarket sector.

Considering our improved financial position, we
expect mid-single digit net sales growth for the remainder of
fiscal 2002. However, any unusual weather conditions,
competitive pressures, or other adverse changes to our business
could materially affect our financial position and results of
operations.






| |          
| | ---------
| | Inflation

We do not believe our operations have been
materially affected by inflation. We believe that we will be
able to mitigate the effects of future merchandise cost
increases principally through economies of scale resulting from
increased volumes of purchases, selective forward buying and the
use of alternative suppliers.






| |                         
| | ------------------------
| | Debt Covenant Compliance

Our senior credit facility contains negative
covenants and restrictions on actions by us and our subsidiaries
including, without limitation, restrictions on indebtedness,
liens, guarantee obligations, mergers, asset dispositions not in
the ordinary course of business, investments, loans, advances
and acquisitions, dividends and other restricted junior
payments, transactions with affiliates, change in business
conducted, and certain prepayments and amendments of
subordinated indebtedness. Our revolving credit facility
requires that we meet certain financial covenants, ratios and
tests, including a maximum leverage ratio and a minimum interest
coverage ratio.

A breach of the covenants, ratios, or
restrictions contained in our senior credit facility could
result in an event of default thereunder. Upon the occurrence of
such an event of default, the lenders under our new senior
credit facility could elect to declare all amounts outstanding
under the new senior credit facility, together with accrued
interest, to be immediately due and payable. If we were unable
to repay those amounts, the lenders could proceed against the
collateral granted to them to secure the indebtedness. If the
lenders under the new senior credit facility accelerate the
payment of the indebtedness, we cannot be assured that our
assets would be sufficient to repay in full that indebtedness,
which is collateralized by substantially all of our assets.

We are highly leveraged. The degree to which we
are leveraged could have important consequences on our ability
to obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes. A
substantial portion of our cash flow from operations must be
dedicated to the payment of interest on our indebtedness,
thereby reducing the funds available for other purposes. We are
substantially more leveraged than some of our competitors, which
might place us at a competitive disadvantage to those
competitors that have lower debt service obligations and
significantly greater operating and financial flexibility

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##### Table of Contents



than we do. We may not be able to adjust rapidly
to changing market conditions and we may be more vulnerable in
the event of a downturn in general economic conditions or in our
business.





Interest
Rates

Financial market risks relating to our operations
result primarily from changes in interest rates. Interest earned
on our cash equivalents as well as interest paid on our variable
rate debt is sensitive to changes in interest rates. Our
variable rate debt relates to borrowings under our senior credit
facility, which is primarily vulnerable to movements in the
LIBOR rate. During February 2002, we entered into an interest
rate swap contract which converted the interest payment
obligation on $100.0 million of our 12% Senior Notes to a
floating rate, set quarterly, equal to the 3 month LIBOR +
760 basis points.

At May 5, 2002, including the
$100.0 million notes that are part of the interest rate
swap contract, 47% of our outstanding debt was at variable
interest rates and 53% of our outstanding debt was at fixed
interest rates. With $300.0 million in variable rate debt
outstanding, a 1% change in the LIBOR rate to which this
variable rate debt is tied would result in a $3.0 million
change in our annual interest expense. This estimate assumes
that our debt balance remains constant for an annual period and
the interest rate change occurs at the beginning of the period.




Critical Accounting Matters

For a discussion of our critical accounting
matters, please refer to our Annual Report on Form 10-K/A
filed on May 10, 2002.




Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards
Board (FASB or the Board) issued Statement of
Financial Accounting Standards No. 141 (SFAS 141),
Business Combinations, and No. 142 (SFAS 142),
Goodwill and Other Intangible Assets. SFAS 141 supersedes
Accounting Principles Board Opinion (APB)
No. 16, Business Combinations. The provisions of
SFAS 141 (1) require that the purchase method of
accounting be used for all business combinations initiated after
June 30, 2001, (2) provide specific criteria for the
initial recognition and measurement of intangible assets apart
from goodwill, and (3) generally require that unamortized
negative goodwill be written off immediately as an extraordinary
gain instead of being deferred and amortized. SFAS 141 also
requires that upon adoption of SFAS 142 we reclassify the
carrying amounts of certain intangible assets into or out of
goodwill, based on certain criteria. SFAS 142 supersedes
APB 17, Intangible Assets, and is effective for fiscal
years beginning after December 15, 2001. SFAS 142
primarily addresses the accounting for goodwill and intangible
assets subsequent to their initial recognition. The provisions
of SFAS 142: (1) prohibit the amortization of goodwill
and indefinite-lived intangible assets, (2) require that
goodwill and indefinite-lived intangibles assets be tested
annually for impairment (and in interim periods if certain
events occur indicating that the carrying value of goodwill
and/or indefinite-lived intangible assets may be impaired),
(3) require that reporting units be identified for the
purpose of assessing potential future impairments of goodwill,
and (4) remove the forty-year limitation on the
amortization period of intangible assets that have finite lives.

SFAS 142 requires that goodwill be tested
annually for impairment using a two-step process. The first step
is to identify a potential impairment and, in transition, this
step must be measured as of the beginning of the fiscal year.
However, a company has six months from the date of adoption to
complete the first step. The second step of the goodwill
impairment test measures the amount of the impairment loss
(measured as of the beginning of the year of adoption), if any,
and must be completed by the end of our fiscal year. Intangible
assets deemed to have an indefinite life will be tested for
impairment using a one-step process which compares the fair
value to the carrying amount of the asset as of the beginning of
the fiscal year.

We adopted the provisions of SFAS 142 on
February 4, 2002. As of the end of the first quarter of
fiscal 2002, we were still in the process of completing our
initial goodwill impairment test. We expect to complete that
first step of the goodwill impairment test before the end of the
second quarter of fiscal 2002. Any impairment charge that
results from this test will be recorded as a cumulative effect
of a change in accounting

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principle in the Companys statement of
operations for fiscal year 2002 and would be a non-cash and
non-operating charge. Because of the complexity involved in
adopting certain provisions of SFAS 142, it is not
practicable to reasonably estimate the impact of adopting these
statements on the Companys financial statements at the
date of this report, including whether any transitional
impairment losses, which could be material, will be required to
be recognized.


SFAS 142 requires the presentation of net
income and related earnings per share data adjusted for the
effect of goodwill amortization. The following table provides
adjusted net income and earnings per share data for the thirteen
weeks ended May 5, 2002 and May 6, 2001, to illustrate
the impact of goodwill amortization on the results of the prior
year period ($ in thousands except per share amounts).

|                                       |                                   |                |       |        |  |   |       |      | 
|-------------------------------------- | --------------------------------- | -------------- | ----- | ------ |  | - | ----- | ---- | 
|                                       |                                   |               
|                                       |                                   | Thirteen Weeks
|                                       |                                   | Ended         
|                                       |                                   |               
|                                       |                                   | May 5,         |       | May 6,
|                                       |                                   | 2002           |       | 2001  
|                                       |                                   |                |       |       
|Reported net income                    |                                   | $              | 3,380 |        |  | $ | 2,253 |     
|Add: goodwill amortization, net of tax |                                   |                |      |        |  |   | 782   |     
|                                       |                                   |                |       |        |  |   |       |     
|Adjusted net income                    |                                   | $              | 3,380 |        |  | $ | 3,035 |     
|                                       |                                   |                |       |        |  |   |       |     
|Basic earnings per share:              |                                   |                |       |        |  |   |       |     
|                                       | Earnings per share as reported    |                | $     | 0.10   |  |   | $     | 0.08 | 
|                                       | Goodwill amortization, net of tax |                |       |       |  |   |       | 0.03 | 
|                                       |                                   |                |       |        |  |   |       |     
|                                       | Adjusted earnings per share       |                | $     | 0.10   |  |   | $     | 0.11 | 
|                                       |                                   |                |       |        |  |   |       |     
|Diluted earnings per share:            |                                   |                |       |        |  |   |       |     
|                                       | Earnings per share as reported    |                | $     | 0.10   |  |   | $     | 0.08 | 
|                                       | Goodwill amortization, net of tax |                |       |       |  |   |       | 0.03 | 
|                                       |                                   |                |       |        |  |   |       |     
|                                       | Adjusted earnings per share       |                | $     | 0.10   |  |   | $     | 0.11 | 
|                                       |                                   |                |       |        |  |   |       |     

Our intangible assets, excluding goodwill,
consist of favorable leasehold interests. As such, SFAS 142
did not impact the useful lives assigned to these intangible
assets. Accumulated amortization as of May 5, 2002 and
February 3, 2002 was $10.2 million and
$9.7 million, respectively. Estimated amortization expense
relating to leasehold interests for future periods is listed
below ($ in thousands):

|            |       |   |       |       | 
|----------- | ----- | - | ----- | ----- | 
|Fiscal 2002 |       | $ | 1,663 |      
|Fiscal 2003 |       |   | 1,643 |      
|Fiscal 2004 |       |   | 1,369 |      
|Fiscal 2005 |       |   | 1,264 |      
|Fiscal 2006 |       |   | 1,185 |      
|            |       |   |       |      
|            | Total |   | $     | 7,124 | 
|            |       |   |       |      

The changes in intangible assets, including
goodwill, for the first quarter of fiscal 2002 are as follows ($
in thousands):

|                               |                          |             |         |              |  |             |      |             |   |   |     |     |      |   |         |         | 
|------------------------------ | ------------------------ | ----------- | ------- | ------------ |  | ----------- | ---- | ----------- | - | - | --- | --- | ---- | - | ------- | ------- | 
|                               |                          | Carrying    |         |              |  |             |      | Carrying   
|                               |                          | value as of |         |              |  |             |      | value as of
|                               |                          | February 3, |         |              |  |             |      | May 5,     
|                               |                          | 2002        |         | Amortization |  | Adjustments |      | 2002       
|                               |                          |             |         |              |  |             |      |            
|Amortized intangible assets:   |                          |             |         |              |  |             |      |             |   |   |     |     |      |   |         |        
|                               | Leasehold interests, net |             | $       | 16,581       |  |             | $    | (431        | ) |   | $   | (40 | )(a) |   | $       | 16,110  | 
|Unamortized intangible assets: |                          |             |         |              |  |             |      |             |   |   |     |     |      |   |         |        
|                               | Goodwill                 |             |         | 126,846      |  |             |      |            |   |   |     | 223 | (b)  |   |         | 127,069 | 
|                               |                          |             |         |              |  |             |      |             |   |   |     |     |      |   |         |        
|Total intangible assets        |                          | $           | 143,427 |              |  | $           | (431 | )           |   | $ | 183 |     |      | $ | 143,179 |        
|                               |                          |             |         |              |  |             |      |             |   |   |     |     |      |   |         |        

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|    |                                                                                                 
|--- | ------------------------------------------------------------------------------------------------
|(a) | Represents write-offs for stores identified for
    closure.                                    
|   
|(b) | Represents a contingent payment made for a store
    acquisition consummated during fiscal 2000.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 replaces certain
previously issued accounting guidance, develops a single
accounting model for long-lived assets, and broadens the
framework previously established for assets to be disposed of by
sale (whether previously held or newly acquired). We adopted
SFAS No. 144 as of the beginning of fiscal 2002. The
adoption of this standard did not have a material effect on our
financial position, results of operations or cash flows.




Forward-looking Statements

The foregoing Managements Discussion and
Analysis contains certain forward-looking statements about the
future performance of the Company that are based on
managements assumptions and beliefs in light of the
information currently available. These forward-looking
statements are subject to uncertainties and other factors that
could cause actual results to differ materially from those
statements. Factors that may cause differences are identified in
our Annual Report on Form 10-K/A, and are incorporated
herein by reference.

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PART II

OTHER INFORMATION




Item 1.     Legal
Proceedings

We were served on March 8, 2000 with a
complaint filed in Federal Court in the Eastern District of New
York by the Coalition for a Level Playing Field, O.K. and, based
on the current amended complaint, 255 individual auto parts
dealers alleging that we and seven other auto parts dealers
(AutoZone, Inc., Wal-Mart Stores, Inc., Advance Stores Company,
Inc., Discount Auto, Inc., The Pep Boys  Manny, Moe
and Jack, Inc., OReilly Automotive, Inc., and Keystone
Automotive Operations, Inc.) violated the Robinson-Patman Act.
Only 15 of the individual plaintiffs asserted claims
against us. The complaint, which has been amended, alleges that
we and other defendants knowingly either induced or received
discriminatory prices from large suppliers, allegedly in
violation of Section 2(a) and 2(f) of the Robinson-Patman
Act, as well as received compensation from large suppliers for
services not performed for those suppliers, allegedly in
violation of Section 2(c) of the Robinson-Patman Act. In
May 2002, we reached a tentative settlement with all of the
plaintiffs that provides for the payment of nominal
consideration by us. As the first step in the settlement, the
attorneys for us and the plaintiffs have filed with the Court a
Stipulation and Order for the dismissal with prejudice of all
claims by all plaintiffs against us.

We currently and from time to time are involved
in other litigation incidental to the conduct of our business.
The damages claimed in some of this litigation are substantial.
Although the amount of liability that may result from these
matters cannot be ascertained, we do not currently believe that,
in the aggregate, they will result in liabilities material to
our consolidated financial position, results of operations or
cash flows.




Item 2.     Changes
in Securities and Use of Proceeds

NONE




Item 3.     Defaults
upon Senior Securities

NONE




Item 4.     Submission
of Matters to a Vote of Security Holders

We held a special meeting of shareholders on
February 26, 2002 in which the shareholders approved the
issuance of our common stock to certain investors upon the
conversion of, and in lieu of cash interest payments on, certain
7% convertible subordinated debentures recently issued to such
investors. The shareholders voted as follows:

|           |  |         |         |         |  |  |        | 
|---------- |  | ------- | ------- | ------- |  |  | ------ | 
|For        |  | Against |         | Abstain
|           |  |         |         |        
|26,680,336 |  |         | 369,174 |         |  |  | 12,108 | 




Item 5.     Other
Information

NONE

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Item 6.     Exhibits
and Reports on Form 8-K

(a) Exhibits:

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.01   |  | Restated Certificate of Incorporation of the
    Company, incorporated herein by reference to Exhibit 3.01
    of the Companys annual report on Form 10-K, filed on
    May 4, 1998 (File No. 001-13927).                                                                                                                                                                                                                             
|3.02   |  | Certificate of Correction to the Restated
    Certificate of Incorporation of the Company, incorporated herein
    by reference to Exhibit 3.02 of the Companys annual
    report on Form 10-K, filed on May 4, 1998 (File
    No. 001-13927).                                                                                                                                                                                        
|3.03   |  | Amended and Restated By-Laws of the Company,
    incorporated herein by reference to Exhibit 3.03 of the
    Companys annual report on Form 10-K, filed on
    April 28, 1999 (File No. 001-13927).                                                                                                                                                                                                                                   
|3.03.1 |  | First Amendment to Amended and Restated By-laws
    of the Company, incorporated herein by reference to
    Exhibit 3.03.1 of our annual report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).                                                                                                                                                                                                                           
|4.01   |  | Securities Purchase Agreement dated as of
    December 7, 2001 by and among CSK Auto Corporation, LBI
    Group Inc. and Investcorp CSK Holdings L.P., including form of
    Debenture and form of Make Whole Warrant, incorporated herein by
    reference to Exhibit 99.2 of our Current Report on
    Form 8-K, filed December 11, 2001.                                                                                            
|4.01.2 |  | Purchase Agreement, dated December 7, 2001,
    by and among CSK Auto, Inc; CSK Auto Corporation, Automotive
    Information Systems, Inc. and CSKAUTO.COM, Inc., as Guarantors;
    and Credit Suisse First Boston Corporation, J.P. Morgan
    Securities Inc. and UBS Warburg LLC as Purchasers,
    incorporated herein by reference to Exhibit 99.4 of our
    Current Report on Form 8-K, filed January 18, 2002.                
|4.01.3 |  | Amendment No. 1 to Securities Purchase
    Agreement dated as of May 16, 2002 by and between CSK Auto
    Corporation, LB I Group Inc. and Investcorp CSK Holdings
    L.P., incorporated herein by reference to Exhibit 4.04.01
    to our Registration Statement on Form S-3, filed
    May 17, 2002 (File No. 333-77008).                                                                                                           
|4.01.4 |  | Amended and Restated Registration Rights
    Agreement, dated May 16, 2002, by and between CSK Auto
    Corporation, LB I Group Inc. and Investcorp CSK Holdings
    L.P., incorporated herein by reference to Exhibit 4.05.01
    to our Registration Statement on Form S-3, filed
    May 17, 2002 (File No. 333-77008).                                                                                                             
|4.02   |  | Credit Agreement, dated as of December 21,
    2001, by and among CSK Auto, Inc., the lenders from time to time
    a party thereto, and JP Morgan Chase Bank, Credit Suisse
    First Boston, and UBS AG, Stamford Branch, incorporated
    herein by reference to Exhibit 99.2 of our Current Report
    on Form 8-K, filed January 18, 2002.                                                                                        
|4.02.1 |  | Indenture, dated December 21, 2001, by and
    among CSK Auto, Inc.; CSK Auto Corporation, as guarantor;
    Automotive Information Systems, Inc. and CSKAUTO.COM, Inc., as
    subsidiary guarantors; and the Bank of New York, as Trustee,
    incorporated herein by reference to Exhibit 99.3 of our
    Current Report on Form 8-K, filed January 18, 2002.                                                                       
|4.02.2 |  | Registration Rights Agreement, dated
    December 21, 2001, by and among CSK Auto, Inc; CSK Auto
    Corporation, Automotive Information Systems, Inc. and
    CSKAUTO.COM, Inc., as Guarantors; and Credit Suisse First Boston
    Corporation, J.P. Morgan Securities Inc. and
    UBS Warburg LLC as Purchasers, incorporated herein by
    reference to Exhibit 99.5 of our Current Report on
    Form 8-K, filed January 18, 2002.
|4.03   |  | ISDA master agreement executed as of March 2002
    between Lehman Brothers Special Financing Inc. and CSK Auto,
    Inc., incorporated herein by reference to our Annual Report on
    Form 10-K, filed on April 23, 2002 (File
    No. 001-13927).                                                                                                                                                                                   
|10.01  |  | Third Amendment to Stockholders Agreement,
    incorporated herein by reference to Exhibit 10.18.6 to our
    Registration Statement on Form S-4, filed on June 6,
    2002 (File No. 333-82492).                                                                                                                                                                                                                                     

(b) Reports on Form 8-K:



| |                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On March 5, 2002 we filed a current report
    on Form 8-K, to report under item 5 thereof, the
    issuance of a press release announcing shareholder approval to
    issue our common stock to certain investors upon the conversion
    of and in lieu of cash interest payments on the outstanding 7%
    convertible subordinated debentures.

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SIGNATURE

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.



| |                     
| | --------------------
| | CSK AUTO CORPORATION



| |     |                                                               
| | --- | --------------------------------------------------------------
| | By: | /s/ DON W. WATSON 
     ______________________________________

| |                        
| | -----------------------
| | Don W. Watson          
| | Chief Financial Officer

DATED: June 6, 2002

22



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EXHIBIT LIST

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.01   |  | Restated Certificate of Incorporation of the
    Company, incorporated herein by reference to Exhibit 3.01
    of the Companys annual report on Form 10-K, filed on
    May 4, 1998 (File No. 001-13927).                                                                                                                                                                                                                             
|3.02   |  | Certificate of Correction to the Restated
    Certificate of Incorporation of the Company, incorporated herein
    by reference to Exhibit 3.02 of the Companys annual
    report on Form 10-K, filed on May 4, 1998 (File
    No. 001-13927).                                                                                                                                                                                        
|3.03   |  | Amended and Restated By-Laws of the Company,
    incorporated herein by reference to Exhibit 3.03 of the
    Companys annual report on Form 10-K, filed on
    April 28, 1999 (File No. 001-13927).                                                                                                                                                                                                                                   
|3.03.1 |  | First Amendment to Amended and Restated By-laws
    of the Company, incorporated herein by reference to
    Exhibit 3.03.1 of our annual report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).                                                                                                                                                                                                                           
|4.01   |  | Securities Purchase Agreement dated as of
    December 7, 2001 by and among CSK Auto Corporation, LBI
    Group Inc. and Investcorp CSK Holdings L.P., including form of
    Debenture and form of Make Whole Warrant, incorporated herein by
    reference to Exhibit 99.2 of our Current Report on
    Form 8-K, filed December 11, 2001.                                                                                            
|4.01.1 |  | Registration Rights Agreement dated as of
    December 7, 2001 by and among CSK Auto Corporation, LBI
    Group Inc. and Investcorp CSK Holdings L.P., incorporated herein
    by reference to Exhibit 99.3 of our Current Report on
    Form 8-K, filed December 11, 2001.                                                                                                                                                            
|4.01.2 |  | Purchase Agreement, dated December 7, 2001,
    by and among CSK Auto, Inc; CSK Auto Corporation, Automotive
    Information Systems, Inc. and CSKAUTO.COM, Inc., as Guarantors;
    and Credit Suisse First Boston Corporation, J.P. Morgan
    Securities Inc. and UBS Warburg LLC as Purchasers, incorporated
    herein by reference to Exhibit 99.4 of our Current Report
    on Form 8-K, filed January 18, 2002.                
|4.01.3 |  | Amendment No. 1 to Securities Purchase
    Agreement dated as of May 16, 2002 by and between CSK Auto
    Corporation, LB I Group Inc. and Investcorp CSK Holdings
    L.P., incorporated herein by reference to Exhibit 4.04.01
    to our Registration Statement on Form S-3, filed
    May 17, 2002 (File No. 333-77008).                                                                                                           
|4.01.4 |  | Amended and Restated Registration Rights
    Agreement, dated May 16, 2002, by and between CSK Auto
    Corporation, LB I Group Inc. and Investcorp CSK Holdings
    L.P., incorporated herein by reference to Exhibit 4.05.01
    to our Registration Statement on Form S-3, filed
    May 17, 2002 (File No. 333-77008).                                                                                                             
|4.02   |  | Credit Agreement, dated as of December 21,
    2001, by and among CSK Auto, Inc., the lenders from time to time
    a party thereto, and JP Morgan Chase Bank, Credit Suisse First
    Boston, and UBS AG, Stamford Branch, incorporated herein by
    reference to Exhibit 99.2 of our Current Report on
    Form 8-K, filed January 18, 2002.                                                                                        
|4.02.1 |  | Indenture, dated December 21, 2001, by and
    among CSK Auto, Inc.; CSK Auto Corporation, as guarantor;
    Automotive Information Systems, Inc. and CSKAUTO.COM, Inc., as
    subsidiary guarantors; and the Bank of New York, as Trustee,
    incorporated herein by reference to Exhibit 99.3 of our
    Current Report on Form 8-K, filed January 18, 2002.                                                                       
|4.02.2 |  | Registration Rights Agreement, dated
    December 21, 2001, by and among CSK Auto, Inc; CSK Auto
    Corporation, Automotive Information Systems, Inc. and
    CSKAUTO.COM, Inc., as Guarantors; and Credit Suisse First Boston
    Corporation, J.P. Morgan Securities Inc. and UBS Warburg LLC as
    Purchasers, incorporated herein by reference to
    Exhibit 99.5 of our Current Report on Form 8-K, filed
    January 18, 2002.
|4.03   |  | ISDA master agreement executed as of March 2002
    between Lehman Brothers Special Financing Inc. and CSK Auto,
    Inc., incorporated herein by reference to our Annual Report on
    Form 10-K, filed on April 23, 2002 (File
    No. 001-13927).                                                                                                                                                                                   
|10.01  |  | Third Amendment to Stockholders Agreement,
    incorporated herein by reference to Exhibit 10.18.6 to our
    Registration Statement on Form S-4, filed on June 6,
    2002 (File No. 333-82492).